The energy behind today’s ASX gains


In a good day so far on the ASX, it’s the energy related companies that are really seeing significant gains.

At the time of writing, the S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) was up 1.0% at 4,169.2 points after a strong lead from Wall Street and some positive economic data.

As my colleague Mike King has reported, better than expected retail sales and record full-year auto sales have helped put a spring in the market’s step.

Job cuts and new projects

Among the gainers in the energy space have been Linc Energy (ASX: LNC) and Origin Energy (ASX: ORG), which both updated the market this morning.

Linc has taken steps to slash its cash burn by retrenching 60 workers, mostly from its clean energy and corporate divisions. The changes are reported to be behind a halving of Linc’s cash burn from over $38m per quarter to $19m per quarter (excluding its Oil and Gas business).

‘Cash burn’ is industry jargon for the cash loss each quarter. At the moment these parts of the company leave the business with $38m less cash than it starts each quarter with, so the halving is a significant improvement.

The company is funding that cash burn from its profitable US oil business, but shareholders must be wondering when they’ll see some of that money for themselves.

APLNG A-OK

Meanwhile Origin Energy has announced that the second production facility will be commissioned at its Australia Pacific LNG joint-venture plant. Origin will have a smaller proportional holding as a result of the final investment from the joint venture partners.

The market liked both announcements, with Linc shares gaining 2.6% just before the close of the day’s trade and Origin adding 3.6%.

It was a good day for all energy stocks in the ASX 200, with every company in the S&P/ASX 200 Energy (Index: ^AXEJ) (ASX: XEJ) showing gains in the last stages of today’s trade.

If you’re in the market for some high yielding ASX shares, look no further than our ”Secure Your Future with 3 Rock-Solid Dividend Stocks” report. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Scott Phillips is an investment analyst with The Motley Fool. You can follow Scott on Twitter @TMFGilla. Take Stock is The Motley Fool Australia’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691).

OUR #1 DIVIDEND PICK FOR 2016...

Forget BHP and Woolworths. This "dirt cheap" company is growing like gangbusters, and trading on a 5.6% dividend yield, FULLY FRANKED (8% gross). With interest rates set to stay at these low levels for years to come, for hungry investors, including SMSFs, this ASX company could be the "holy grail" of dividend plays for 2016.

Enter your email below to discover the name, code and a full investment analysis in our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2016.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.